UK market monthly performance from 1693

The 2013 edition of the Almanac looks at the monthly performance of the FTSE All Share Index from 1970. The first chart below is similar, showing the average returns for each month, except it covers the period 1980-2012. As remarked in the Almanac, historically the strong months in the year have been April and December and the weakest months May, June and September.

But has this always been the case? What if we look at a longer period, will the same months still be the strong and weak ones?

The second chart shows the results of analysing monthly data for a UK composite stock market index for the period 1693-2012.

As can be seen, the months of April and December have also been strong over the 319 years since 1693. And as far as weak months go, June and September have also been weak over the longer period.

The main changes have been the switch from weak to strong months for July and October, and the weakening of January.

Note: in the category of “things that haven’t changed much since 1693” might also go William Penn’s proposal (published in that year) for a European federation.

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Ultimate death cross, UK market 1845-1945

In July 2012 Albert Edwards, an analyst at Société Générale, published a note warning that the S&P 500 Index was nearing an ultimate death cross. An ultimate death cross is when the 50-month moving average moves down through the 200-month moving average.

The 2013 edition of the Almanac plotted these moving averages for a composite UK stock market index for the period 1945 to today.

In those 67 years there had been no ultimate death cross. We wondered how common they might be and so plotted another chart for the period 1845-1945 (see below).

As can be seen for the 100 years prior to 1945, ultimate death crosses were not uncommon. In fact, the 50-month MAV was below the 200-month MAV (shaded in the chart) for 51 of the 100 years.

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